energy efficiency makes business sense

1 | Energy Efficiency and Renewable Energy eere.energy.gov

Kathleen HoganDeputy Assistant Secretary for EEOffice of Energy Efficiency and Renewable Energy

Energy Efficiency Makes Business Sense

June 14, 2012


Importance of Energy Efficiency

Part of “all-the-above” strategy

Achieves key objectives:•Local job creation / retention

•Homeowner and Business/Industrial savings

• Lower bills

• Avoided infrastructure over longer-term

•Environment / public health benefits

•Industrial competitiveness

First fuel

McKinsey, 2009


Progress• Recovery Act

– $12 B in energy efficiency investments (low income, public buildings)– 700 K low income homes weatherized -- ahead of target– $550 M in loan funds across 35 states– 2,300 local governments engaged in projects

• Appliance/equipment programs– Standards for 30+ products since 2009 -- savings of almost $400 B thru 2030 – New certification procedures; new public database; compliance program– ENERGY STAR

• Building codes– Almost 60% of states have adopted or made significant steps to adopt latest building codes from

16 in 2009

• State energy savings targets – About 50% of states have targets; and more than half of those of 1% or more / yr

• Ratepayer funded investment– Grown to $6.6 B / yr in 2010, more than double a few years ago


• Technologies• Materials• Processes

• Building performance information• Quality workforce • Financing solutions• Energy savings calculation methods• State/local/Federal leadership

• High efficiency new homes• Deep retrofits • Industrial improvements / CHP• Advanced materials / processes

• Appliance standards• Building codes: adoption,

implementation• Federal standards

DOE Priorities

Robust Upgrade Industries

5 | eere.energy.gov

Working Together

State and

Local

Regional

Federal

Broad (not comprehensive) illustration


DOE Efforts to Address EE Challenges

Replicable Models (for Upgrades)•Consumer•Financial Firms•Program Administrators•Contractors

Better Information / Tools•To engage consumers

•Skilled/trained workforce

•Credible evaluation methods

•Access to energy data

State/Local Policies

Better Buildings ChallengeBetter Buildings NeighborhoodsSuperior Energy PerformanceFinance Best practices (ESPCs, RLFs)

Building MPG Ratings / Upgrade Tools Sector-specific new technologies / approachesIndustrial CHP Outreach

Workforce guidelines, training, credentials

Uniform Methods Project

Green Button…………..

SEE Action facilitationState Energy Program Grants

Using convening power, recognition for excellence, technical expertise, technical assistance to develop consistent approaches, best practices, objective information

7 | eere.energy.gov

Goals:• 20% savings in commercial / industrial buildings by

2020

• Replicable, demonstrated models across different organization types / ownership types / building types

Leadership opportunity:• Challenge partners commit to:• Set public energy savings goals• Announce innovative strategies• Share implementation strategies and results • Financial allies commit to provide financing • Program administrators commit energy use data and

multimeasure programs

DOE supports and recognizes partners 7

Program launched Dec 2:•60+ Partners and Allies to date

Commitments:•1.6 Billion sq ft commercial space•$2 Billion in financing through allies•300 manufacturing facilities•Federal facility goal: $2 Billion in energy investment

Full list of partners and allies at http://www4.eere.energy.gov/challenge/

Better Buildings Challenge

http://www4.eere.energy.gov/challenge/

8 | eere.energy.gov

• Leverage ARRA

• Challenge partners announced at the program launch:

– Cities: Atlanta, Denver, DC, Houston, Los Angeles, Sacramento, Seattle

– States: Minnesota, Iowa

• Adding new partners to provide broad solution set

• National Summit for States and Local communities

– June 26-27 in Denver

– Highlight innovative strategies and implementation models

– Profile efforts of BBC partners

– Recognize ~ 30 new partners (Cities and States)

Better Buildings Challenge: Public Sector

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Replicable Business Models: Residential Upgrades

• Business model guide • July 9-11, 2012: Residential EE Solutions

Conference – Arlington, VA

Next Steps

• 32 States; 41 3-year grants of $1.4 to $40 million each and $450 million in total

• Develop sustainable energy efficiency upgrade programs

• Achieve 15-30% energy savings from energy efficiency upgrades

• Upgrade >100,000 buildings • Leverage $1-3 B in additional resources• Engage 10-30k contractors in upgrade work• Save consumers approximately $65 million per year

Overview

• Transition to DOE• Proposal for program improvements out for

comment – more scalable future• Prescriptive and performance path• Second comment period – Fall 2012• Pilots Fall/Winter• New program requirements – Summer 2013

Update


Access to Financing: Range of Models

DOE providing Technical Assistance to:•Transition RLFs to investment authorities •Design public private partnerships•Attract institutional investors•Standardize financing products and develop secondary markets

Examples of Options / Models •On-Bill Finance (utility bill/utility capital): Utility lends capital, originates and services all loans. •On-Bill Invoice: (private capital, bonding) Utility invoices, provides no capital and may not originate loan •3rd Party Bill (utility, private capital): Third party originates and services loans. •Investment Authority/State Agency (bonding, QECB, ARRA, state, rate payer capital): Originates and services loans directly or through 3rd Party BillCredit enhancements can be applied to any of the above examples (rate payer, ARRA, state, QECB)

• Leverage ARRA Funding ($550 in RLF across 35+ states)• Increase access, lower cost of capital for efficiency customers

Goals


Better Information: Building Performance

2nd Phase of Implementation Initial Testing(draft)


Accelerating Technology: CBEA Rooftop Unit Air Conditioner (RTU) Challenge

Jan 2011: RTU Challenge spec released: performance + features•18 IEER: up to 50% energy reduction relative to ASHRAE 90.1 •$1 billion annual energy savings if all 10-20 ton units in U.S. were replaced

May 2012: Deadline to Enter the RTU Challenge

•5 companies have entered with candidate products•1 company has met requirements: Daiken-McQuay

Apr 2013: Deadline to Meet the RTU Challenge

CBEA members supporting spec


Industrial Efficiency / Combined Heat and Power Benefits of CHP •High efficiency; up to (75-80% efficient vs. 45% for separate)•Cost savings to user•Emissions reductions•Improved grid reliability; distributed in location

Policy IssuesState policy barriers require cooperation between: regulators, utilities, environmental stakeholders, and end-users

Federal Resources •9 Regional Clean Energy Application Centers

• Help evaluate state policies and impact on CHP• Share best practices• Identify manufacturing facilities with CHP potential

•EPAs pending Boiler MACT rule compliance: • DOE Technical Assistance for 14,000 major source boilers

•SEE Action Industrial Energy Efficiency and CHP WG• Upcoming regional workshops in coordination with DOE• June 21: MW. Fall: NE/Mid-Atl, SE, West • Attendees will include State regulators, utilities, industry

40 gigawatts of new, cost-effective CHP by 2020 yields:•1 quad savings •150 mmt CO2 savings•75% of McKinsey CHP economic potential•$10 billion/yr savings for energy users relative to typical use of energy


Quality WorkforceGoal: High-quality workforce to support upgrade industry / energy management


Better MeasurementUniform EM&V Methods ProjectVision: Uniformity and Transparency for Energy Savings Calculations

for EE Projects and Programs • Different calculation methods cause confusion

• 17 different guidance documents (i.e. Technical Reference Manuals) to estimate savings cover 21 states

• Estimates vary by factor of two to more than 10

• Uniform methods will:• Strengthen credibility of savings calculations (for administrators, regulators,

investors)• Simplify comparison of savings across similar programs and jurisdictions • Reduce EM&V development costs

Goal: Uniform methods for calculating program-level savings for up to 20 measures. Seven underway:


Better MeasurementUniform EM&V Methods Project

Non-Profit Organizations• Tom Eckman, Regional Technical

Forum (RTF)

• Steve Kromer, Efficiency Valuation Organization (EVO)/ SKEE

• Marty Kushler, American Council for an Energy-Efficient Economy (ACEEE)

• Julie Michals, Northeast Energy Efficiency Partnerships (NEEP)

• Steve Schiller, on behalf of Lawrence Berkeley National Laboratory

Observers• Linda Ecker, AEP Ohio

• Carla Frisch, Department of Energy

• Michael Li, Department of Energy

• Phyllis Reha, Minnesota, Public Utility Commission

• Steve Rosenstock, Edison Electric Institute

• Lisa Wood, Institute for Electric Efficiency

Efficiency Service Providers/ESCO• Donald Gilligan, National Association

of Energy Service Companies (NAESCO)

State Officials• Miles Keogh, National Association of

Regulatory Utility Commissioners (NARUC)

• Amy Royden-Bloom, National Association of Clean Air Agencies (NACAA)

• Kevin Gunn, Missouri Public Service Commission

• Nancy Seidman, Commonwealth of Massachusetts

• Dub Taylor, State of Texas

• Diana Lin, Association of State Energy Officials (NASEO)

• Malcolm Woolf, State of Maryland

Utilities• Mike Brandt, Commonwealth Edison

• Mary Ann Ralls, National Rural Electric Cooperative Association (NRECA)

• Chuck Rea, MidAmerican Energy Company

• Gene Rodrigues, Southern California Edison (SCE )

• Emmett Romine, Detroit Edison (or Bill Newbold Jr.)

Participants

• Technical reviews of the first set of protocols occurred in spring 2012.

• Stakeholder review process begins June 25, 2012

• First set of 7 protocols will be published late in 2012

• Second set of 10 protocols to be published in 2013

Update


Better Information on Utility Bills

• Green Button• Standardized data access

• Commitments from ~ 20 utilities representing ~30 million households

• Data applications challenge

• Data Access Best Practices• Available April 2012

• 20% utilities responding

• Data Initiative to engage entrepreneurs

http://www.greenbuttondata.org/


State and Local Policies – SEE Action • Network of 200+, led by state and local policymakers, bringing EE to scale• Provides best practices and recommended approaches on key EE policy areas

based on state/local experience • Resources include:

– Analyzing and Managing Bill Impacts of Energy Efficiency Programs

– Benchmarking/Disclosure and Auditing/Retro-Commissioning Model Policies for Commercial and Public Buildings

– Industrial Energy Efficiency and Combined Heat and Power (CHP) Model Policies and Programs Guide

– EM&V for Behavior-Based Efficiency Programs

– Regulators’ Guide to Addressing Issues Arising from 3rd Party Data Access for EE • DOE Technical Assistance

– Access to assistance from National labs, Regional Efficiency Organizations, technical experts

For more information: www.seeaction.energy.gov

http://www.seeaction.energy.gov/


FY12: $14 million, announced end of JuneThree Areas of Interest:

SEP Competitive Grants

FY11 Grants in Northeast

Massachusetts: $900k to test aspects of asset rating system, informing national effort

New Hampshire: $380k to develop a statewide plan for achieving energy efficiency investment goals


Looking forward

• Leverage ARRA

• Address Barriers

• Grow Partnerships– State/Local, Regional, National

Energy efficiency is top priority energy resourceSavings, jobs, competiveness, economy, environment

Growing energy efficiency industry

energy efficiency makes business sense

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